Kong PR: AGM will be Intersting PRESS RELEASE
Oct. 25, 2013, 6:34 p.m. EDT
Mr. Fan Zhong Kong, Shareholder of Majestic Gold Corp., Expresses Concern Regarding the Management and Strategic Direction of the Company and Files Early Warning Report
VANCOUVER, BRITISH COLUMBIA, Oct 25, 2013 (Marketwired via COMTEX) -- This press release sets out the current intentions and holdings of Mr. Fang Zhong Kong in the securities of Majestic Gold Corp. ("Majestic" or the "Company"). As of today's date, Mr. Kong has ownership and control of 133,314,714 common shares in the capital of Majestic ("Common Shares"), 1,900,000 stock options to purchase Common Shares ("Options"), and 17,555,555 non-transferable warrants to purchase Common Shares ("Warrants"), which in the aggregate represents 17.78% of the total issued and outstanding Common Shares on a partially diluted basis.
For a number of months Mr. Kong has been engaged in discussions with Mr. Rod Husband, the President and Chief Executive Officer of Majestic, and other members of the board of directors of Majestic regarding the management and strategic direction of the Company. As a result of these discussions, Mr. Kong has concluded that Majestic is not being managed in the best interests of the Company and its shareholders and that a change in management is required to preserve and enhance shareholder value.
In view of the foregoing, Mr. Kong intends to take such actions as he considers necessary or advisable to protect and enhance the value of Majestic shares, including, without limitation, actions intended to cause changes to the management and strategic direction of the Company.
For the purposes of Multilateral Instrument 62-104 - "Take-Over Bids and Issuer Bids", Mr. Kong may be considered to be acting jointly or in concert with Mr. Lei Wang, a securityholder of Majestic. To the knowledge of Mr. Kong, Mr. Wang has ownership and control over 38,000,000 Common Shares and 200,000 Options, representing approximately 4.55% of the issued and outstanding Common Shares on a partially diluted basis. The combined securityholdings in Majestic of Mr. Kong and Mr. Wang represent approximately 22.22% of the issued and outstanding Common Shares on a partially diluted basis.
Mr. Kong first acquired ownership of securities of Majestic on July 21, 2009, when he acquired 22,000,000 Common Shares and 22,000,000 Warrants, each Warrant exercisable by Mr. Kong to acquire one additional Common Share of Majestic for two years after closing. Mr. Kong purchased such Common Shares and Warrants ("Units") from Majestic pursuant to a non-brokered private placement at a price of $0.05 per Unit (the "2009 Subscription"). As of the closing of the 2009 Subscription, Mr. Kong's securityholdings in Majestic represented 17.58% of the total issued and outstanding Common Shares on a partially diluted basis.
Immediately after the 2009 Subscription, Mr. Kong's securityholdings represented 9.64% of the total issued and outstanding Common Shares on an undiluted basis, and 17.58% of the total issued and outstanding Common Shares on a partially diluted basis.
On June 22, 2010 Majestic granted Mr. Kong 1,900,000 Options exercisable up to June 22, 2015 at a price of $0.12 per Common Share. On September 13, 2010, Mr. Kong acquired 40,000,000 Common Shares from Majestic, at a deemed issue price of $0.05 per Common Share, as consideration for Mr. Kong's interest in Yantai Zhongia Mining Inc., a Chinese Co-operation Company that was established to hold the rights to an interest in thirteen exploration licenses located in the Chinese province of Shandong. On July 16, 2011, Mr. Kong acquired 19,870,270 Common Shares from Majestic, at a price of $0.10 per Common Share, pursuant to the exercise of Warrants acquired under the 2009 Subscription. On June 22, 2012, Mr. Kong acquired 17,555,555 Common Shares and 17,555,555 Warrants, each Warrant exercisable by Mr. Kong to acquire one additional Common Share of Majestic for two years after closing. Mr. Kong purchased such Common Shares and Warrants pursuant to a non-brokered private placement at a price of $0.18 per Unit. On May 10, 2013, Mr. Kong acquired 33,888,889 Common Shares from Mr. Chao Zhao at $0.14 per Common Share pursuant to a private agreement.
Mr. Kong acquired all of his current securityholdings of Majestic for investment purposes. Depending on market and general economic conditions and other factors, Mr. Kong may acquire or dispose of Common Shares in the open market, by private agreement or otherwise.
Each statement in this press release of the percentage of total issued and outstanding Common Shares held by Mr. Kong, Mr. Wang or both of them together is based on the disclosure of the total issued and outstanding Common Shares contained in the Company's consolidated financial statements for the first period ended following the effective date of such statements, as filed under the Company's profile on SEDAR.
This press release does not constitute a solicitation of proxies and is being issued pursuant to the early warning requirements of applicable Canadian securities laws. An early warning report is being filed by Mr. Kong in accordance with applicable securities laws and will be available on the SEDAR profile for Majestic Gold Corp. at www.sedar.com.